Consider the following five investments. If the nominal interest rate is five percent, which projects should be undertaken? (Note: The returns are for one period later.)
Investment Cost Returns
A $100 $106
B 300 313
C 200 218
D 50 55
E 400 418
At an interest rate of five percent, projects A, C and D have returns that exceed the five percent threshold.
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Hyundai is a large South Korean company that produces finished steel products. Hyundai plans to buy raw steel from U.S. Steel. As a result, the demand curve for U.S. Dollars ________ and the demand curve for South Korean Won ________
A) shifts rightward; does not shift B) shifts rightward; shifts leftward C) does not shift; shifts leftward D) shifts leftward; shifts rightward
The more we have of a good or service, the smaller is its marginal benefit and the less we are willing to pay for an additional unit of it
Indicate whether the statement is true or false
You are an economic advisor to the president. You are asked to recommend a policy to promote long-term economic growth in the economy. Which of the following policies would you choose?
A) a reduction in taxes on luxury yachts B) an investment tax credit C) a reduction in sales taxes D) all of the above
The law of diminishing marginal returns says that as additional units of a variable input are added to
a. fixed amounts of other inputs, total output will eventually remain constant b. varying amounts of other inputs, total output will eventually decline c. fixed amounts of other inputs, the resulting increases in total output will eventually become smaller d. varying amount of other inputs, the resulting increases in total output will eventually become smaller e. a declining amount of output, technology will eventually deteriorate